Key takeaways:
CPG deal value more than doubled year-over-year in Q1 2026, even as deal volume continues to fall. A small number of transformational deals are reshaping entire portfolios.
Mega-deals are getting done, and take-privates are accelerating, but leveraged transactions in the $100 million to $1 billion range remain difficult to finance, creating selective opportunities for strategic buyers with strong balance sheets.
Private equity continues to take public retailers private, viewing the sector as broadly mispriced, not broadly impaired.
Companies are paying premiums for access to wellness brands and first-party data, as key forces continue affecting consumer behavior: the rising use of GLP-1s, the scrutiny of processed ingredients, and persistent affordability pressure.
The consumer your portfolio was built around, the one who filled a cart on autopilot, chose products by habit, and stuck with brands for years, is fading. And some dealmakers are already moving.
For four years, deal volume has been falling. But in Q1 2026, deal value more than doubled year-over-year. Three transactions alone, close to $120 billion in combined value, tell the story: a small number of companies have decided the portfolio they have isn't the portfolio they need.
Three key forces are driving the shift and disrupting the CPG sector:
Persistent affordability pressure (from grocery inflation, shrinking federal food assistance, and consumers redefining what “value” means by making tradeoffs) is shifting where dollars are spent.
The rise in adoption of GLP-1 weight-loss medications is changing how millions of consumers make choices about food, beverages, and other consumer goods.
As ongoing scrutiny of processed ingredients intensifies, regulators, retailers, and shoppers are reshaping what sits on a shelf and how it's labeled.
Similar dynamics are also playing out in the retail sector. Private equity firms spent the first half of 2026 taking retailers private at prices the public market wouldn't pay. The bet is that the public markets have applied a blanket discount to the entire sector, and that companies willing to do multi-year operational work, out of view of quarterly earnings pressure, will be worth considerably more on the other side.
The portfolio reckoning
The next six months in CPG and retail M&A will be shaped by a few things happening at once: a wave of portfolio restructuring on the sell side, a narrow set of deal themes drawing premium valuations on the buy side, and a widening split between retail formats that work and ones that don’t.
On the sell side, portfolios are being taken apart
Financial results are driving divestitures. Total shareholder returns at many of the largest CPG companies have trailed the broader market for years, and nearly half of CPG executives say that the way their business is currently organized will not survive the next decade. The results?
Major food and beverage portfolios are already in strategic review. Expect more divestitures, faster, of non-core brands from large CPG companies.
Activist investors are forcing the issue. 2025 was a significant year for activist campaigns globally, with the majority of large campaigns carrying an explicit M&A demand—divestitures, spin-offs, or strategic combinations. Companies that don't move on their own find that shareholders will move them.
Ingredients are becoming a focus. Brands with significant exposure to ultra-processed ingredients face growing scrutiny from regulators, retailers, and shoppers.
What buyers are paying for—and why
Buyside deals in CPG share a common logic: Portfolios are changing because the consumer is changing. Three deals announced in the past year (Kimberly-Clark/Kenvue, McCormick/Unilever, and KDP/JDE Peet’s) account for close to $120 billion in combined value. These deals share a common logic: the consumer these companies were built to serve is changing, so their portfolios need to change. For example:
Wellness and health-oriented brands are the most competed-for targets. Brands with credible science-backed or better-for-you positioning are commanding premium valuations as consumer purchasing shifts.
Companies with proprietary consumer data carry premiums. As AI changes how products are discovered and purchased, first-party data and loyalty platforms are expected to drive returns over the next decade.
Large strategics are using this window to consolidate categories. The mega-deals getting done are decade-defining structural bets.
Retail's private turn
Retail deals are following a different playbook: with public markets discounting the sector, sellers are coming to the table, and private buyers are moving in to scoop up quality companies. Retail is bifurcating sharply. Experience-led and value formats are gaining share. Mid-tier discretionaries, by contrast, are increasingly without a natural buyer in the public markets, allowing private equity to step in.
The thesis is straightforward. Public market investors have applied a blanket discount to the entire retail sector, regardless of whether a specific company is actually impaired. Buying at that discount, removing quarterly earnings pressure, and executing a multi-year operational reset is producing returns the public markets won’t underwrite now.
As long as that valuation gap holds, PwC expects take-private activity to continue.
The CEOs getting deals done right now aren't reacting to a cycle. They're responding to a structural shift. The consumer many portfolios were built around is gone, and the leaders who recognize that are using this window to reposition before their hand is forced.
Mike Ross,Consumer Markets Deals Leader, PwC USThe bottom line: What CPG and retail dealmakers should watch
The CPG and retail deal market is splitting in two. On one side, companies are moving—exiting categories without a future, buying ones that do, and accepting short-term volatility to reposition early. On the other side are companies waiting for conditions to settle, which is unlikely to happen on a useful timeline.
Wellness positioning is commanding a premium in CPG. First-party consumer data is a strategic asset. And mid-tier discretionary retail deals will be left to private equity.
In the next six months, successful leaders will be those who can discern short-term noise from structural changes. That’s hard to do in real time, but the companies acting now are setting the terms for the next decade.